SEC Fraud

Reuters reports that the SEC voted unanimously to go on a path that could force US companies to use international accounting rules, rather than the current U.S. Generally Accepted Accounting Principles (GAAP), to report financial information by the year 2014. International rules, specifically the International Accounting Standards Board (IASB), are less flexible and more clearly defined, part of the reason why the SEC hopes to adopt it. The SEC has stated they will evaluate the international financial reporting standards (IFRS) by 2011 and decide on whether they will mandate their use.

The SEC’s timeline, or so-called road map, complements a global plan to converge U.S. GAAP and international accounting standards — a move that the accounting industry has been clamoring for.

SEC Chief Accountant Conrad Hewitt called the proposed road map significant to the future of high-quality accounting standards.

For years, U.S. accounting rule maker the Financial Accounting Standards Board and the IASB have been simultaneously working on a plan to speed up the convergence of U.S. and international accounting rules.

They are expected to soon release a plan so that all major capital markets are able to operate from one set of standards by 2013.

At the moment, a hundred countries use or plan to use the IFRS reporting standard.